Mid-sized Spanish banks say won't need EU aid

June 11, 2012|Reuters

MADRID (Reuters) - Spanish mid-sized Banco Sabadell and Banco Popular said on Monday they did not plan to tap EU loans of up to 100 billion euros agreed on this weekend and insisted they were not part of a group of Spanish banks that needed to be rescued.

The two banks, respectively Spain's fifth- and sixth-biggest lenders by assets, were pinpointed on Friday by the International Monetary Fund as likely to have trouble in meeting new capital requirements and possibly recording losses in 2012.

"Banco Sabadell does not intend to ask the (European) fund for money. A few days ago I stated it would be positive to set up a specific fund because a solution was pending for entities which cannot raise capital," Sabadell chairman Josep Oliu said in a statement on Monday.

"The way it has been conducted, a difference is being made between a full-scale rescue and a rescue limited to this problem (of not being able to raise capital)," he added.

Banco Popular's chairman Angel Ron made similar remarks during the bank's shareholder meeting on Monday, according to a spokesperson at the bank.

The spokesman said that Ron, in an answer to a question from a small shareholder, made clear that the bank would not have to request public funds or tap the EU financial assistance to comply with new, tougher capital requirements.

The IMF said on Friday Spain's banking sector needed about 40 billion euros in extra capital to allow them to withstand severe economic conditions.

Spain's two biggest banks, Santander and BBVA, also said on Saturday, minutes after the EU financial package was agreed on by euro zone finance ministers, that they would not need to access European money.